“One commodity mixed with another:

must not be sold as pure,

nor a bad one as good;
not less as many,
nor anything that is at hand or
that is concealed.”

MANU SMRITI
 CONSUMER
PROTECTION ACT, 1986
 The Preceding Acts
• Sales Of Goods Act (1930), established during British rule was the
exclusive source of consumer protection.
• The Indian Penal Code of 1860 has a number of provisions to deal with
crimes against consumers. It deals with offenses related to the use of
false weights and measures, the sale of adulterated food or drinks, the
sale of noxious food or drink, and the sale of adulterated drugs.
• The Essential Commodities Act of 1955, the Prevention of
Food Adulteration Act of 1954 and the Standard of Weights and
Measures Act of 1976, the law of Torts & The Contract Act also protect
consumers

•
 Why a CPA then ?
• It is estimated that for about half a century from 1914 to
1965, only 613 tort cases came before the appellate courts.
• The traditional doctrine of negligence imposes heavy
responsibility on the plaintiff to prove each of its required
elements.
• The orthodox legal requirements under the law of torts and
contracts forced the policy makers to craft specific
legislation to protect consumers.
 Objectives
• It is intended to provide justice which is “less formal, [and
involves] less paper work, less delay and less [expense]”.
• It is known as the Poor Man’s Litigation
• Commands the consumer’s support
• User friendly
• Cost Effective Tool
 User Friendly & Cost Effective
• Suit can be filed both for defective products and deficient
services
• Only a nominal fee has to be paid by the consumer
• No need to send a legal notice to the opposing party
• A simple letter to the Consumer Forum would initiate legal
action
• No requirement of a lawyer, if the consumer can represent
himself.
 Extent & Coverage Of The Act
• The Act applies to all goods and services unless
specifically exempted by the Central Government.
• It covers all the sectors whether private, public or
cooperative.
• The provisions of the Act are compensatory in nature.
• The provisions of this Act are in addition to and not in
derogation of the provisions of any other law for the time
being in force.
• The Act envisages establishment of Consumer Protection
Councils at the Central and State
levels, whose main objects will be to promote
and protect the rights of the consumers.
 Structure of The Act
• 3 tier quasi judicial machinery at the National, State &
District Levels
• National Consumer Disputes Redressal Commission -
known as "National Commission" deals with complaints
involving costs and compensation higher than Rs. 20 lakhs.
• State Consumer Disputes Redressal Commissions - known
as "State Commission.
• District Consumer Disputes Redressal Forums -
known as "District Forum.
Case :Spring Meadows Hospital and others
vs. Harjol Ahluwalia
• Harjot, a minor was brought to the Spring Meadows
hospital.
• Dr. Bhutani examined him and made the diagnosis that the
patient is suffering from typhoid and prescribed medicines.
• Ms.Matthew, a nurse, wrote down the medicine name as
“Inj. Lariago” and gave it to Mr.Ahluwalia.
• Mr.Ahluwalia brought the medicine from a nearby medical
store and Ms.Bina Matthew injected Harjot
with it, who collapsed immediately upon receiving
the dose.
 The Case :Continued
• Dr.Dhananjay who was the Resident Doctor was called and
he diagnosed that the patient is suffering from cardiac arrest.
• Harjot was later brought to AIIMS where it was found that
irreparable damage had been done to his brain and he
would survive only in a vegetative state.
• Harjot’s parents approached the Delhi State Consumer
Commission for mental and asked for Rs.28 lakhs as
compensation.
 The Ruling
• The cardiac arrest was caused by high dose of medicine.
• The injection was to be given by Dr.Dhananjay, but he
allowed the nurse to give it. Thus, the court found him
negligent.
• The nurse was found guilty of dereliction of duty and the
hospital for employing unqualified people and entrusting
the minor in their care.
• The Delhi State Commission awarded Rs.12.5 lakhs to the
minor patient and Rs.5 lakhs to the parents.
•
 The Contentious Issues
• Can the parents of the child be considered as consumers ?
• Is the Commission under the CPA entitled to award the
compensation for the mental agony and suffering of the
parents ?
• Whether compensation can be awarded to both the parents
and the child or only to the person who has been the
beneficiary of services (child) ?
 Supreme Court Observed
• The parents and the child are both “consumers” as the
definition of a consumer includes “beneficiary of services”
which is different from the person who “hires the services”
• The Commission is fully justified in awarding compensation
to both the parents and the child for the injury each one of
them has sustained.
 Consumer Protection Council

The Consumer Councils are created to advise and assist the consumers in
seeking and enforcing their rights.

Chapter II of the consumer Protection Act comprising of Sections 4to 8

deals with Consumer Protection Councils.

We have Consumer Protection Councils both at Centre level and State

level.
 Objects of the Councils [Sections 6 and 8]

• Right to safety – It is right to be protected against the

marketing of goods and services which are hazardous to life and
property.

• Right to information - It is right to be informed about the

quality, quantity, potency, purity, standard and price of goods or
services, with a view to protect the consumer against unfair
trade practices.

» Right to choose - The right to choose can be

made meaningful by ensuring access to a variety
of goods and services at
competitive prices.
 Objects of the Councils (Contd.)

• Right to represent - It is right to be heard and to be assured

that consumer’s interests will receive due consideration at
appropriate forums.

• Right to redressal - It is a right to seek redressal against unfair

trade practices or restrictive trade practices or unscrupulous
exploitation of consumers.

• Right to education - The right to consumer education

is a right which ensures that consumers are informed
about the practices prevalent in the market and
the remedies available to them.
 Central Council
• Composition [Section 2 and rule 3] :
Members of the councils are selected from various areas of
consumer interest, who are, when possible, leading
members of state wide organisations representing segments
of the consumer public so as to establish a broadly based
and representative consumer council.

The Central Council shall consist of the following members

not exceeding 150, namely :-

1. The Minister in-charge of Consumer Affairs in

the Central Government who shall be the
Chairman of the Central Council.
 Central Council (Contd.)
2. The Minister of State (where he is not holding inde­pendent
charge) or Deputy Minister in-charge of Consumer Affairs in
the Central Government who shall be the Vice-Chairman of
the Central Council.
3. The Secretary in-charge of Consumer Affairs in the Central
Government who shall be the member-secretary of the
Central Council.
4. The Minister in-charge of Consumer Affairs in States
5. Eight Members of Parliament—five from the Lok
Sabha and three from the Rajya Sabha.
6. The Secretary of the National Commission for
Scheduled Castes and
Scheduled Tribes.
 Central Council (Contd.)
7. Representatives of the Central Government Departments and
autonomous organisations concerned with consumer interests
—not exceeding twenty
8. Representatives of the Consumer Organisations or consumers
—not less than thirty-five
9. Representatives of women—not less than ten.
10. Representatives of farmers, trade and industries—not
exceeding twenty
11. Persons capable of representing consumer interest
not specified above—not exceeding fifteen

Term - The term of the Council is three years.

 Central Council (Contd.)
• Vacancy - Any member may, by writing under his hand to
the Chairman of the Central Council, resign from the
Council. The vacancies, so caused or otherwise, are filled
from the same category by the Central Government and
such person shall hold office so long as the member whose
place he fills would have been entitled to hold office, if the
vacancy had not occurred.

• Meetings of the Central Council [Section 5] -

Central Council is required to organise at least
one meeting every year. In addition, it
may meet as and when necessary. Time and
place of the meeting is decided by the
Chairman of the council.
 State Consumer Protection Councils
[Section 7]
• Composition - The power to establish State Councils is with
the States. The Act provides that the Minister in charge of
consumer affairs in the State Government shall be the
Chairman of the State Council. About the number and
qualifications of the rest of the members, State is the
deciding authority.

• Meetings - The State Council meet at least twice a

year. In addition, it may meet as and when
necessary. The council may meet at such time and
place as the Chairman may think fit.
Procedure in regard to the transaction of its business
is prescribed by the State Government.
 Working Groups (Rule 3)
• For the purpose of monitoring the implementation of the
recommendations of the Central Council and to suggest the
working of the Council, the Central Government may
constitute from amongst the members of the Council, a
Standing Working Group, under the chairmanship of the
Member Secretary of the Council. The Standing Working
Group shall consist of not exceeding 30 members and shall
meet as and when considered necessary by the
Central Government.
REDRESSAL AGENCIES PROVIDED UNDER
THE CONSUMER PROTECTION ACT
• The Consumer Protection Act provides for a 3 tier
approach in resolving consumer disputes. There
are three levels of consumer courts —
• 1. The district court, called the District Consumer
Disputes Redressal Forum (District Forum)
• 2. The State Consumer Disputes Redressal
Commission (State Commission)
• 3. At the national level, there is National
Consumer Disputes Redressal Commission
(National Commission).
DISTRICT FORUM (Section 10)
• It consists of 1 president and 2 other members (1
of whom is to be a woman).

• Every appointment of the president and

members is made by the State Government on
the recommendation of a selection committee
consisting of the following —

a. The President of the State Commission – Chairman.

b. Secretary, Law Department of the State - Member.
c. Secretary in charge of the Department dealing with
consumer affairs in the State — Member
 Continued…
• Every member of the District Forum is to hold office for a term
of 5 years or up to the age of 65 years, whichever is earlier.
However, he/she shall not be eligible for reappointment.
• A vacancy in the office of president or a member may occur
after the expiry of his term, or by his death, resignation, or
removal.
• The salary or honorarium and other allowances payable to,
and the other terms and conditions of service of the members
of the District Forum shall be such as may be

prescribed by the State Government. Different

States have made different rules in this regard.
 RULES FOR REMOVAL

A president or member of a District Forum may be removed by

the State Government, who -
a. has been adjudged an insolvent, or
b. has been convicted of an offence involving moral
turpitude, or
c. has become physically or mentally incapable of
performing his duties, or
d. has acquired such financial interest in the matter as would
prejudicially affect his functions as a president or member, or,
e. has abused his position so as to render his continuance to
office prejudicial to public interest.
 STATE COMMISSION (Section 16)
• State Commission consists of a president and two members
one of whom is to be a woman.
• President of a State Commission is appointed by the State
Government after consultation with the Chief Justice of the High
Court. Other members of the Commission are made by the State
Government on the recommendation of a selection committee
consisting of the following, namely -
a. President of the State Commission - Chairman.
b. Secretary of the Law Department of the State - Member.
c. Secretary, in charge of Department dealing with consumer affairs in
the State - Member.
 Continued…
• Every member of the State Commission shall hold office for 5
years or up to the age of 67 years, whichever is earlier, and he
shall not be eligible for re-appointment.
• Rules as to the vacancy related in the office of the president or
any member are similar to those discussed in context of the
members of the District Forum.
• The salary or honorarium and other allowances payable to, and
the other terms and conditions of service of, the members of
the State Commission shall be such as may be prescribed by
the State Government.
 NATIONAL COMMISSION (Section 20)
• The National Commission consists of a president and 4 other
members (one of whom is to be a woman).
• The President is appointed by the Central Government after
consultation with the Chief Justice of India, the appointment
of other members of the Commission is made by the Central
Government on the recommendation of a selection
committee, consisting of –
a. a person who is a Judge of the Supreme Court, to be

nominated by the Chief Justice of India – Chairman.

b. the Secretary in the Department of Legal Affairs in the
Government of India – Member.
c. Secretary of the Department dealing with consumer affairs
in the Government of India – Member.
 Continued…
• Before appointment, the president and member(s) of the
National Commission have to take an undertaking that he
does not and will not have any such financial or other interest
as is likely to affect prejudicially his functions as such
member.
• Every member of the National Commission is to hold office
for a term of 5 years or up to the age of 70 years, whichever
is earlier and is not eligible for re-appointment.
• A vacancy in the office of president or a member may occur
after the expiry of his term, or by his death,
resignation, or removal.
 JURISDICTION
• The term jurisdiction may be defined as the authority or
legal power to hear and decide the cases.
• A court may adjudicate only those matters which fall
under its jurisdiction.
• The question of jurisdiction has to be considered with
reference to the value, place, and nature of the subject
matter.
• Jurisdiction of Consumer Forums (i.e., consumer courts)
differ in terms of –
– Monetary value of Claims (Pecuniary Jurisdiction)
– Geographical Areas (Territorial Jurisdiction)
– Appellate Powers (Appellate Jurisdiction)
 JURISDICTION – DISTRICT FORUM
• PECUNIARY JURISDICTION
District Forum entertains the cases where the value of
claim is upto Rs. 5 Lakh. Where a claim exceed this limit,
the matter is beyond the jurisdiction of the Forum.

Example : A filed a complaint with a District Forum claiming

Rs. 6,00,000 as against a supplier of machinery. The
complaint was rejected on the ground that it was beyond
the jurisdiction of the District Forum. A revised his claim to
Rs.4,99,999 and filed the plaint again with the
same District Forum. The plaint was accepted and tried.
 Continued…
• TERRITORIAL JURISDICTION
Every District Forum has definite geographical limits
within which it can exercise its jurisdiction. A case is
supposed to fall within such territory when at the time of
the institution of the complaint the party against whom the
claim is made actually and voluntarily resides or carries
on business or personally works for gain in that area.
Also, the cause of action, wholly or in part, arises in that
area.
• APPELLATE JURISDICTION
District Forum is the lowest rung of the ladder of the
consumer courts. Hence, no appeal lies in this
court.
 JURISDICTION – STATE COMMISSION
• PECUNIARY JURISDICTION
State Commission entertains the cases where the value
of claim exceeds Rs.5 lacs but is upto Rs.20 lacs.

Example : Mr.X in Mumbai bought a house from housing

board for Rs. 4 lakh. Due to defect in the house, its wall
fell down on the Mrs.X and she dies. Mr.X sues the
Housing Board claiming Rs.18 lacs as compensation.
This matter will lie with the State Commission of Mumbai.
Although the value of house is less than 5 lacs,
the decisive factor regarding jurisdiction is the value of
claim.
 Continued…
• TERRITORIAL JURISDICTION
The Consumer Protection Act does not specifically
provide for the territorial jurisdiction of the State
Commission. Thus it is governed by the general principle
of the law which are contained in section 20 of the Civil
Procedure Code. Broadly these principles are on the
similar lines on which the territorial jurisdiction of District
Forum is based.
• APPELLATE JURISDICTION [SECTION 17(a)(ii)]
State Commission has power to adjudicate upon the
appeals made against the order of the District
Forums. Any person aggrieved by an order of the
District Forum may prefer an appeal against such
order within 30 days from the date of order.
 Continued…
• REVISIONAL JURISDICTION [SECTION 17(b)]
State Commission may pass appropriate orders in any
consumer dispute which is pending before or has been
decided by any District Forum within the State, where
State Commission is of the view that the District Forum
has -
- exercised jurisdiction which it was not entitled to, or
- failed to exercise such jurisdiction which it was entitled
to, or
- exercised its jurisdiction illegally or with material
irregularity.
JURISDICTION – NATIONAL COMMISSION
• PECUNIARY JURISDICTION
National Commission may entertain all the matters where the
value of claim exceeds Rs. 20 lakh. It is the highest level of
Consumer Forums.
• TERRITORIAL JURISDICTION
The territorial jurisdiction of the National Commission is whole of
India except the State of Jammu & Kashmir. However, the
Consumer Protection Act is applicable only if the cause of action
arise in India. If the cause of action arises out of India, National
Commission has no jurisdiction over the matter.
Example: Gulab Hotchand Bhagchandaney v.
Egyptian Airlines III (1994)
 Continued…
• APPELLATE JURISDICTION
The National Commission has jurisdiction to entertain
appeals against the order of any State Commission. The
appeal may be made within 30 days from the date of the
order of the State Commission.

• REVISIONARY JURISDICTION [SECTION 21(b)]

It is available to the National Commission in the cases
where there has been wrongful, illegal, and improper
exercise of jurisdiction or failure to exercise jurisdiction
on the part of State Commission.
Example: Kinetic Engineering Ltd. v. Samasi
Saunand [1993]
 Procedure for Jurisdiction
• Consumer Forums function like Courts.
• Composition is made to best represent
interests of Consumers.
• Have specified jurisdictions.

What procedures do they adopt?

• Section 13 – District Forum
• Section 18 – State Commission
• Section 22 - National Commission
 Criteria for complaint
• Made with respect to goods and services.
• To determine whether defective or not.
• Need to test goods in concern.

Exception
• Defect can be determined without technical
support.
• Test is not feasible.
 Conditions
• Where laboratory tests is required
• Where no laboratory tests is required

Trigger
Consumer is expected to do:
• File individual copies to judges.
• Specify essential information.
• Provide supporting correspondence.
• Specify compensation demanded.
Procedure by District Forum (contd.)
• Where no laboratory test is required

Forum refers copy

to opp. party

Opp. No
Settle dispute as per
party
evidence by complainant
acts ?

Yes

Opp.
No
party Decide the matter as per
denie merits of case
s?

Yes

Settle dispute as per

Issue appropriate order
evidence by both parties
Procedure by District Forum
• Where laboratory test is required

Forum refers copy

to opp. party

Opp.
Opp. Yes No
party Issue appropriate
party
denies order
acts ?
?

Yes
No
Complainant Opportunity of
deposit lab. fees hearing

Forum sends Objecting party

sample to Lab. objects in writing

Lab. reports Sends to opp.

findings to Forum party with remarks
Procedure by National Commission
• Prescribed by Consumer Protection Rules, 1987

• Framed by the Central Government

Complaint to contain following:
– Name, description & address of complainant
– Name, description & address of opposite party(ies)
– Facts relating to complaint & when and whore it arose
– Documents in support of allegations
– Relief which complainant claims

• As far as possible follow Section 13 guidelines

Procedure by National Commission (contd.)
• On the date of hearing, both parties or agents to appear
before commission.

• Complainant or agent fails to appear -

– Dismiss the complaint or decide it on merits

• Opposite party or its agent fails to appear –

– Decide the complaint ex parte

• Complaint will be decided within 3 months when no test or

analysis is required.

• Complaint will be decided within 5 months when test or

analysis is required.
Consumer Protection (Amendment) Bill, 2002
Some of the alteration in definitions
Complainant will now also include the legal heir or
representative of the consumer, in case of his death
Complaint may be filed against a trader as well as service
provider for adopting deceptive practices in provision of
services
Consumers do not include persons who obtained goods for
commercial purposes are under the Act

persons who avail of services for commercial purpose

will fall outside the scope of consumers under the Act
Some of the alternation in definitions..Continued…

Goods that were considered hazards to health and safety

when used were specified under law and some were even
exempt if the legal requirements of display of warning were
met with (the classic example being cigarettes)
The modified definition of Manufacturer seems to include
any manufacturer of goods and parts; assembler of goods
and parts and the person who puts or causes to be put, his
mark on any product

Regulation has been defined to mean the

regulations made by the National Commission
under the Act
Continued…..
The expanded definition of 'restrictive trade practice' as not only
including tie-up sales but also delay beyond period agreed to for
provision of goods or services that has led to or is likely to lead to a rise
in prices was included in the Ordinance of 1993 and has been given
effect to under the Act
The definition of services has already been interpreted as wide and
inclusive, the specific services mentioned in the definition were only
examples and many more have since been added by the consumer
courts
spurious goods and services are those that are claimed to be
genuine and are actually not so

Unfair trade practice' will now also include withholding from

the participants of any scheme offering gifts, prizes or other
items free of charge
Jurisdiction
Value of a compliant before the District Forum or pecuniary
jurisdiction has been expanded to a sum of rupees twenty lakh
Value of complaints before the State Commission – in the
range that exceeds rupees twenty lakh but not rupees one
crore compared to the earlier five lakh to twenty lakh

The place of residence or of carrying on business or where

cause of action arose etc. will have a bearing on which State
Commission suit is instituted

Aggrieved parties may appeal to the State

Commission from the District Forum and to the
National Commission from the State Commission
Appeals
The Bill inserts a second proviso to S 15

Any person who is required to pay any amount under the orders of
the forum will not be allowed to go on appeal unless he deposits 50%
of the said amount or Rs. 25,000, whichever is less with the District
Forum

There is no provision for second appeal if a party succeeds

before the District Forum and fails before the State
Commission
Enforcement
The Bill amends both S 25 and S 27. S 25 is to be
substituted with a new section that declares an order for
attachment may be made against the property of a person
failing to abide by interim orders passed by the District
Forum, State or National Commission
The proviso to S 27 is omitted. The District Forum,
State or National Commission shall be deemed to be
and have the powers conferred on the Judicial
Magistrate First Class under the Code of Criminal
Procedure, 1973 and will so function in spite of
anything contained therein
Miscellaneous
S 18 A of the Act that dealt with vacancy of office of the
President is omitted

New S 28 A lays down provisions for serving of notices, etc

S 30 now allows the Central Government to make rules for

the efficient enforcement of the Act
Some major loopholes of the Act still left
unplugged by the 2002 Amendments
One of the biggest achievements of the Consumer
Protection (Amendment) Act, 2002, was the conferment of
First Class Magistrate’s powers to the Consumer Forums or
Commissions
 The main problem regarding the above empowerment
and the relevant provision is the fact that the Gazette
notification for the conferment of First Class Magistrate’s
powers to the Consumer Forums or Commissions is still
not issued. Thus it is practically impossible for the
Forums or Commissions to exercise this power conferred
by the Act
Loopholes..Continued…
• Another lacuna present in the amended Act is the relatively
softer approach adopted by the Act towards the judgment
debtor in its certain provisions

• Another important confusion is created by the amended

S.25 of the Act
Problems resolved by ammendment
• Amendment to Section 11 enhances the jurisdiction of the
District Forum to entertain complaints where the value of the
goods or services and the compensation claimed does not
exceed rupees twenty lakhs. This will be more convenient
for the complainants and also reduce the number of
complaints filed with the State Commission and National
Commission

• Section 12 is substituted to provide that every complaint filed

with the District Forum shall be accompanied with such
amount of fee as may be prescribed
Continued…
• The amendments to section 13 require the District Forum
to refer a copy of the admitted complaint within twenty-one
days from the date of its admission to the opposite party to
give his version within the prescribed time. It also provides
the much needed provision for ex parte order as well as
dismissal of complaint on non-appearance of complainant

• New section 19A provides that endeavour shall be made to

dispose of appeals filed before the State Commission or
the National Commission within ninety days from the date
of admission
Refernces

• http://www.legalserviceindia.com/articles/c
oon.htm
• http://ncdrc.nic.in/1_1.html#_Hlk14966250
3
• http://www.legalserviceindia.com/articles/c
onsumer_avantika.htm